Israeli troops on Friday killed three militants who infiltrated over the border from Egypt to launch an attack and an Israeli soldier also died in the clash, an Israeli army spokeswoman and Israeli media said.
The Israeli military declined immediate comment on reports of Israeli casualties.
"Three armed terrorists crossed the border into Israel and opened fire at troops securing workers who are building the border fence in the area ... They (attackers) were wearing flak jackets and were well armed and carried explosive belts," spokeswoman Lieutenant-Colonel Avital Leibovich said.
She said she did not have information on the identity or affiliation of the gunmen but added that soldiers from a joint male-female army battalion had been involved in the fighting and "managed to thwart a major incident."
An Egyptian security source said one of the gunmen died when a bomb he was carrying detonated and the other two were killed in a gunbattle with Israeli forces, adding that the nationalities of the gunmen were not immediately clear.
In June, militants crossed into Israel from Egypts Sinai desert and fired on Israelis building a barrier on the border, killing a worker, before soldiers killed two of the attackers.
Israel is putting up the border fence to curb an influx of African migrants and improve security, hoping to complete it by the end of the year. It will run along most of the 266-km (165 miles) frontier from Eilat, on the Red Sea, to the Gaza Strip.